The number of immigrants applying for Canadian citizenship has plummeted for the second year in a row in the wake of hefty application fee hikes Ottawa introduced in recent years.

The trend has prompted fears that the current citizenship costs — $530 per adult, plus a $100 right of citizenship fee — are creating a growing underclass of newcomers who can’t afford the fee and hence are prevented from full integration and participation in Canadian society, according to a report published in the Institute for Research on Public Policy.

According to the latest government data, only 36,000 citizenship applications were received from January to June in 2016, just more than one-third of the number for the same period last year.

In 2015, a total of 130,000 citizenship applications were submitted to Immigration, Refugees and Citizenship Canada, compared to an average of 200,000 received in previous years.

“The decline is so significant that it cannot be ignored,” said retired immigration department director-general Andrew Griffith, who obtained the government statistics for policy analysis for the Montreal-based Institute for Research on Public Policy.

“I had thought the citizenship fee increases would provoke a decline in applications, but I was surprised by the steepness of the decline.”

Griffith’s report came just as Canada is celebrating Citizenship Week that runs Oct. 10 to 16.

The former Conservative government raised the citizenship fee to $300 from $100 per adult in 2014, and again to $530 last year — to fully recover the processing cost of applications. The fee had been held constant at $100 for almost two decades.

Although immigration officials said at the time the fee hikes would have no impact on the number of immigrants applying to become citizens, Griffith said the data clearly shows otherwise.

Besides the fee hikes, the only major change to the citizenship program was the new requirement for applicants between the age of 55 and 64 to pass the knowledge test.

Griffith said the group only represents 6 per cent of the new citizen population and the current 2016 data provides a clear picture of the impact of the fee hikes on their own.

“As the government considers further increases to the number of immigrants, current fees mean that fewer will apply to become citizens. If the current 2016 trend continues, we will have 300,000 new immigrants and far less than 100,000 new citizens,” Griffith cautioned.

“This sets the stage for a growing portion of Canadian residents who are not citizens and are effectively disenfranchised. From both a social inclusion and social cohesion perspective, this risks the overall success of the Canadian model of integration.”

Griffith said the increase of the application fee to $530 from $300 appeared to be the tipping point as the full cost recovery puts the financial burden of the program on citizenship applicants.

“Citizenship isn’t just a private good. There are broader benefits to society,” he said. “When you have a larger share of the population that has little or no interest and ability to participate in political life, you run the risk of greater exclusion, less inclusion and less commitment to Canada.”

The Liberal government is currently reviewing Bill C6 to amend Canada’s Citizenship Act, but there is no mention of any adjustment to the citizenship fee.

Griffith said Ottawa should split the cost and reduce the fee to $300 or at least offer exemptions and support to groups who are most affected by the financial barrier.

To be eligible for citizenship, a permanent resident must have been physically present in Canada for at least 1,460 days during the six years prior to the application. Those between 14 and 64 must also provide proof of English or French proficiency, as well as criminal clearances and pass a knowledge test about Canada.